BILL ANALYSIS



C.S.H.B. 1013
By: Romo
04-12-95
Committee Report (Substituted)


BACKGROUND

In order to reduce costs to the state, several infrequent bond
issuers should be placed under the authority of the Texas Public
Finance Authority. Centralized bond issuance would represent cost
effective debt management that could result in a higher bond rating
for the state and save issuance of costs through economies of
scale. Centralizing and consolidating bond issuance for these
agencies would cut issuance costs such as fees for underwriters,
attorneys, financial advisors, rating agencies, printers and
payment to registrars and agents.

The ability of the Texas Public Finance Authority to issue non-self-supporting bonds is of great financial benefit for the State
of Texas. Bonds that are not self-supporting depend solely on the
state's general revenue to pay debt service; self-supporting bonds
are backed by revenue from projects they finance, and do not put
direct pressure on state finances.

PURPOSE

CSHB 1013 authorizes the Texas Public Finance Authority to issue
bonds on the behalf of Texas Department of Commerce, Texas Higher
Education Coordinating Board, Texas Agricultural Finance Authority
and institutions under Section 17, Article VII, Texas Constitution
other than Texas Tech University, Texas Tech University Health
Sciences Center, University of Houston System or a component of
that system.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 9B, Texas Public Finance Authority Act
(Article 601d, Vernon's Texas Civil Statutes) (a) provides for the
authorization of the Texas Public Finance Authority to issue bonds
for Texas Department of Commerce, Texas Higher Education
Coordinating Board, Texas Agricultural Finance Authority and
institutions under Section 17 Article VII of the Texas Constitution
other than Texas Tech University, Texas Tech University Health
Sciences Center, the University of Houston or a component of that
system.

     (b) Removes institutions of higher education authorized to
issue bonds under Article VII      of the Texas Constitution in
addition to Texas Tech University, Texas Tech University    Health
Sciences Center, the University of Houston or a component of that
system.

SECTION 2. Amends Article 601d of the Texas Public Finance
Authority Act (Vernon's Texas Civil Statutes) by adding Section 9D.

     Section 9D. PARTICIPATION OF CERTAIN BUSINESSES IN ISSUANCE OF
     OBLIGATIONS. (a) Identifies (1) "minority group members" the
definition of minority   group member was amended in the substitute
to remove (c) Asian Americans and (d)   Mexican Americans or other
American of Hispanic origin;

               (2) Defines "minority owned business." 
               (3) Defines "woman-owned business."

           (b) Requires that the TPFA make a good faith effort to
issue at least 20 percent          for the total dollar of
obligations to woman-owned and minority-owned          businesses.

           (c) Requires that the authority to submit a report to
the governor and the          legislature at the end of each fiscal
year that includes:

               (1) the name for each woman-owned and minority-owned
business in any               issuance that fiscal year;

               (2) the number of woman-owned and minority-owned
businesses submitting              bids or proposals in connection
with issuance that fiscal year;

               (3) the amount of obligations issued during that
fiscal year and estimated               amount of compensation
received for participation in the issuance by each               woman-owned and minority-owned business.

           (d) Requires the TPFA to give preference to businesses
located in the state if the        cost of quality of services
being offered or bid is equal to the cost and quality       of a
business that does not maintain an office in this state.

SECTION 3. Amends Subchapter D, Chapter 58, Agricultural Code by
adding Section 58.041.

     Sec. 58.041. BOND ISSUANCE BY TEXAS PUBLIC FINANCE AUTHORITY.
Provides   that the Texas Public Finance Authority shall issue
bonds on behalf of the board of the     Texas Agricultural Finance
Authority.

SECTION 4. Amends Subchapter C, Chapter 61, Education Code by
adding Section 61.084.

     Sec. 61.084. BOND ISSUANCE BY THE TEXAS PUBLIC FINANCE
AUTHORITY.     (a) Provides that the Texas Public Finance Authority
shall exercise the board's authority    provided by law to issue
bonds and refunding bonds.

SECTION 5. Amends Subchapter A, Chapter 481, Government code by
adding Section 481.0091.

     Sec. 481.0091. BOND ISSUANCE BY TEXAS PUBLIC FINANCE
AUTHORITY.     Provides that the Texas Public Finance Authority
shall exercise the department's    authority provided by law to
issue bonds and refunding bonds.

SECTION 6. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute adds Texas Tech University, Texas Tech University
Health Sciences Center, the University of Houston or a component of
that system to the exclusion of institutions of higher education
for whom the TPFA may issue bonds.

Also, the definition of "minority group member" is amended to
remove Asian Americans and Mexican Americans or other American of
Hispanic origin.

SUMMARY OF COMMITTEE ACTION

The committee considered HB 1013 in a public hearing on March 6,
1995.

The Chair offered a complete committee substitute for the bill
which was adopted without objection.

The following person testified neutrally on the bill:
Anne L. Schwartz.
The bill was left pending.


The committee considered HB 1013 in a public hearing on March 27,
1995.

The motion to reconsider the vote by which the committee adopted
the committee substitute for the bill prevailed without objection
and the substitute was withdrawn.

The committee considered a new complete committee substitute for
the bill which was adopted without objection.

The motion to reconsider the vote by which the committee adopted
the complete committee substitute for the bill prevailed without
objection.

The substitute was before the committee.  The committee considered
an amendment to the substitute which was adopted without objection.

The Chair instructed the Clerk to incorporate the amendment into
the substitute.

The motion to adopt the committee substitute as amended and report
HB 1013 favorably as substituted, with the recommendation that it
do pass and be printed, prevailed by the following record vote: 5
Ayes, 0 Nays, 0 PNV, 4 Absent.